The Contractor’s Complete Guide to Buying Used Construction Equipment

Why Buying Used Can Be a Smart Move for Growing Contractors

New construction equipment is expensive—and not always necessary. For small and mid-sized contractors, used machines often provide more value per dollar, especially when:

• Margins are tight
  
  
• Project volume is increasing
  
  
• You need to scale your fleet quickly
  
  
• Your team is experienced enough to operate older models
  
  

But buying used comes with unique risks and considerations. In this guide, we’ll walk you through how to source, evaluate, and finance used equipment with confidence—while avoiding the common pitfalls that can turn a bargain into a burden.

Section 1: When to Consider Buying Used Equipment

Buying used construction equipment makes sense if:

• You’re replacing a machine that didn’t last as long as expected
  
  
• You need to expand your fleet for upcoming work
  
  
• You’re entering a new service line (e.g., demolition, earthwork) and want to test demand
  
  
• Your team already rents similar machines regularly
  
  
• You need to preserve cash flow or financing eligibility
  
  

Used gear is especially valuable for:

• Excavators
  
  
• Skid steers
  
  
• Dozers
  
  
• Backhoes
  
  
• Dump trucks
  
  
• Telehandlers
  
  
• Compact loaders
  
  

Many of these machines retain functionality long after their initial depreciation.

Section 2: Where to Find Quality Used Equipment

1. Certified Equipment Dealers
Most reputable dealers offer used inventory with service histories, inspections, and limited warranties. They often partner with financing companies.

2. Online Marketplaces

• Ritchie Bros.
  
  
• IronPlanet
  
  
• Machinery Trader
  
  
• eBay Business & Industrial
  
  

Ensure listings include photos, serial numbers, inspection reports, and contact details.

3. Private Sellers
Often found through classified sites, Facebook groups, or local referrals. Lower prices, but higher risk. You’ll need to do your own due diligence.

4. Auctions
Great for deals—if you’re prepared. Always inspect machines ahead of time, understand buyer premiums, and confirm payment timelines.

Section 3: What to Inspect Before Buying Used Equipment

Even reliable brands like Caterpillar, Komatsu, or Bobcat can suffer from abuse or neglect.

Always check:

• Hours of use relative to expected lifespan
  
  
• Maintenance records (regular oil changes, repairs, fluid checks)
  
  
• Hydraulic systems for leaks or worn hoses
  
  
• Undercarriage wear (especially for track machines)
  
  
• Cab and controls for signs of operator abuse
  
  
• Tires or tracks for remaining life
  
  
• Engine and exhaust for irregular noise or smoke
  
  
• Serial number match with records
  
  

If possible, start the machine, check the diagnostics, and test run before committing.

Can’t inspect it yourself? Hire a third-party inspector or mechanic for an independent evaluation.

Section 4: How to Finance Used Construction Equipment

Yes—used equipment can be financed, but it works a little differently than new purchases.

What lenders look for:

• Machine age and condition: Typically must be under 10–12 years old
  
  
• Dealer reputation: Financing from certified dealers is easier than from private sellers
  
  
• Service history: Machines with clean maintenance logs are more financeable
  
  
• Value retention: Higher-resale machines (excavators, loaders) are more favorable
  
  

Loan terms for used equipment:

• Down payments: 10%–25% is common
  
  
• Interest rates: Slightly higher than for new machines
  
  
• Loan terms: 2–5 years (shorter than new equipment loans)
  
  
• Approvals: 24–72 hours with required documentation
  
  

Required documents:

• Equipment invoice or bill of sale
  
  
• Business bank statements (3–6 months)
  
  
• Proof of business entity (EIN, license)
  
  
• Valid photo ID
  
  
• Credit check (soft pull for pre-qual, hard for approval)
  
  

Some lenders also offer lease-to-own programs on certified used machines with end-of-term buyouts.

Section 5: Red Flags to Watch Out For

• No service history: Increases the risk of hidden issues
  
  
• Equipment with liens: Confirm title is clean before purchase
  
  
• Machines over 15 years old: Financing may be denied
  
  
• Excessive wear for hours used: Could signal neglect or tampering
  
  
• Rust or corrosion in critical areas (frame, bucket, undercarriage)
  
  
• Private sellers unwilling to allow inspection or serial verification
  
  

Buying from a “friend of a friend” without documentation may seem cheap—but can end up being the most expensive mistake.

Section 6: Smart Buying Strategies

Bundle attachments and transport costs
If you’re financing, ask to include add-ons like buckets, couplers, and trailers in the same loan.

Get pre-qualified first
Before shopping, know your budget. Pre-qualification helps you shop with confidence and negotiate better deals.

Run comps
Use resources like RitchieSpecs and Equipment Watch to compare pricing and residual value by model and year.

Buy from someone who’ll still pick up the phone
Especially for used gear, post-sale support can make a big difference.

Section 7: Tax Considerations for Used Equipment

Used equipment qualifies for Section 179, just like new gear—so long as:

• It’s used for business 50% or more of the time
  
  
• It’s placed into service before year-end
  
  

Even if you finance it, you may be able to deduct 100% of the purchase price in the year of acquisition.

Depreciation and deduction strategies should be reviewed with your tax advisor. You can find more guidance at Section179.org.

Final Thoughts: Buy Used With Confidence, Not Compromise

Used construction equipment offers a path to grow your fleet, reduce project delays, and preserve cash flow—without compromising capability. But only when you do your homework.

Make sure the machine fits your needs, check its history, get it inspected, and finance it smartly.

Looking for help financing a used excavator, truck, or compact loader? Contact National Legacy Capital Group. Their team specializes in fast, flexible financing solutions for small contractors—whether buying new or used, from a dealer or private seller.

Frequently Asked Questions (FAQ)

What’s the maximum age for financing used equipment?
Most lenders cap used equipment financing at 10–12 years old, depending on condition and type.

Can I finance equipment from a private seller?
Yes, but the process is more rigorous and may require additional inspection, valuation, and documentation.

Do I need a down payment?
Typically, yes—between 10% and 25%. Some programs may offer zero-down promotions for strong applicants.

Can I deduct the cost of used equipment?
Yes, as long as it’s used for business and placed into service within the tax year, it qualifies for Section 179 deductions.